Chapter 21 – Business Govt



Chapter 1 – People in Business

Stakeholders in Business and their Roles:

Entrepreneur.

Takes the initiative (spots a gap in the market) and risks (financial and personal) Highly motivated to achieve goals.

Brings the resources of labour, money and Raw materials together in a unit called a firm with the objective of making a profit

Producers/Suppliers.

Producers refer to the maker or manufacturer of a good who combines resources to transform raw materials into finished products for consumers. e.g. Kellogg’s provide breakfast cereals.

Suppliers refer to those who supply the materials needed by others to produce their goods e.g. Agricultural Co-Ops supply grain & corn to Kellogg’s for making cereals

Investors.

Prepared to put money into a business venture in order to get a return.

Hope to get a good return but take a risk.

Common way to invest is by buying shares .Return from shares is called a dividend.

Service Providers

People or organisations that provide services to the public or businesses.

Provide a vital range of services for new and existing businesses.

Examples : Accountants, Market research firms, solicitors, banks etc

Employers

An employer is a person who hires another person to work in return for pay.

Reward them with reasonable wages and safe working conditions etc.

Costs for them – Wages, business insurance, PRSI, PAYE, Facilities (canteen etc).

Employers need to be good motivators, and have the skills to run the business.

Employees

An employee is a person contracted to do a particular job in return for a wage/ salary.

Need to be motivated and treated well – fair wage and good working conditions help here.

Have rights and join trade unions to protect themselves.

Hugely important that employer and employee relate well to each other(good industrial relations) to ensure a business runs well and reaches its goals.

Consumer

Purchases goods and services from a seller for their own use.

Household Consumers purchase ordinary goods e.g. bread and butter and durables such as kettles and other electrical appliances.

Businesses consumers purchase items such as machines, equipment, computers, stationary & raw materials.

Consumer needs must be met i.e. they must receive high quality goods at affordable prices or else sales will decline.

Interest Groups

An interest group is an organisation representing a particular body of people who have a common interest.

Try to influence the political and decision making process for their members.

- For example

1. The Irish Farmers association represent the interests of Irish farmers and lobby the government for better treatment.

2. IBEC (Irish Business and Employers Confederation): Its main objective is to provide one voice which advises and represents employers on industrial relations matters. It negotiates on behalf of its members with the Government and the ICTU on industrial relations matters such as wage agreements. It also advises its members where relevant e.g. on new EU legislation.

3. ICTU (Irish congress of trade unions) which lobbies the government on behalf of workers, represents workers on national bodies and gives out information.

Co-operative and Competitive relationships

• A cooperative relationship is where the parties in business work together for their mutual benefit – common objectives.

o Example 1: Entrepreneur/Investor: An entrepreneur has a suitable idea and attracts investors to put money into the idea. The entrepreneur makes a tidy profit and the investor makes a good return on their investment – Both are happy.

• A competitive relationship is where the parties do not work together, each have different objectives.

o Example 1: Entrepreneur/Investor: A competitive relationship will arise if an investor refuses to advance the funds required to establish a new business or the entrepreneur, having received finance is not living up to the commitments entered into and is defaulting on repayments.

Cooperation is good because:

- Less time wasted; work done more quickly and efficiently

- Promotes good industrial relations.

- Businesses cooperating obtain better prices and services.

Results of competition

- Retailers provide better goods and services at more competitive prices.

- Rivalry and conflict among employees.

- Closure of inefficient firms – loss of jobs etc.

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